Monday, 19 December 2016

Wage is Just a Number

On Saturday Numsa (the National Union of Metalworkers of South Africa) rejected the governments suggestion of a R3 500 and proposed instead a R12 500 minimum wage. Now although this is an utterly ridiculous suggestion by people who understand nothing about economics, I thought I'd play with the idea a little bit.

Numsa apparently believes that all employers make enormous profits and that introducing a high minimum wage will just shift those profits from the greedy employers to the poor helpless employees. Unfortunately life doesn't work like that and many, even most employers work on tight profit margins. This means that a general wage increase of R8000 or R5000 or even R2000 to meet the minimum wage can be more than enough to drive the bottom from black to red. And that's when businesses start closing their doors.

When the government presented the proposed R3500 minimum wage they at least did so with reasonable economic argument. The sole reasons Numsa presented were: 1) that it was what they had been fighting for at Marikana; 2) they should use R12500 in honour of those killed at Marikana; and 3) that that is a decent living wage. All they are doing here is trying to play on our emotions, and to our own detriment, emotion almost always outweighs reason in society. Numsa now looks like a great defender of the rights of the poor for championing a high minimum wage, but if we were to implement it what would really happen? Do you have a domestic worker? Would you still have a domestic worker if you had to pay her R12500 a month? Probably not. Most people would say no. And all employers think the same! If someone only contributes R6000 to the bottom line and now they must pay them R12500, are they going to keep that worker at a R6500 loss? Not a chance! So anyone who's value in the work place is less than R12500 will suddenly find himself or herself out of a job, and I would argue that that is more than half the population.

But assume for a second that somehow employers manage to hold on to all their employees. The only way they can keep the doors of their business open is by raising prices, and the most affected by this will be farmers and food prices. So where as before I may have been earning R4000 a month, I now feel so much wealthier earning R12500 a month, but that feeling of wealth is superficial, because whereas before I was paying R10 for a loaf of bread, now I am paying R30. The fact of life is that the farmer and every other business owner still need to make a profit, so by the knock on effect everything becomes more expensive and everyone's wages go up and in the end R12500 and R4000 are exactly the same amount of money.

These are just a couple of reasons why a minimum wage, especially one as high as Numsa has suggested, won't  work. They are in very simple form, but I feel that is the best way present an argument, but I will no doubt go deeper on this issue at some point. So really this argument is completely irrelevant. The government will pay no attention to it, but for those who don't foresee the consequences, it makes Numsa look good, and that is exactly what they really want. Don't fall into the trap.

Tuesday, 13 December 2016

The Beginning of Freedom

Greetings and salutations! Welcome to my weekly rant about the dark, sinister soap opera we all tune into everyday, willingly or unwillingly, we cannot avoid it, on television, radio, Facebook, print or even from the mouths of other people: the news.

Ja, you thought I was going to be talking about something exciting and then I said "the news." But it actually is quite exciting if you think about it, or maybe if I - quite justly - advertised it as "a reality show- so intense, so bizarre, so real it'll make you question everything you know. And every moment affects you!" I don't know why news agencies haven't caught onto this sort of advertising, I mean, it can even sell shows about hair-dressing and cakes. But perhaps the reason it seems so official and certainly uninteresting to some people is the air of impartiality news outlets need to maintain. But one who looks closely will find that the media are hardly ever impartial or objective.

So you are probably wondering about the title of this blog. No? Okay, read it again. Now you're wandering. The Open Mind? So this guy thinks he is the most open-minded person around and wants to help us free ourselves from our own dogmatism? No. I'm actually pretty firm in my opinions, though I do put high value on listening to and evaluating the opinions of others. The reason I started this blog and gave it the name i did is that my opinion is not portrayed in the media in South Africa. Yes I am South African if you were wondering. We've already discussed that most media outlets are somewhat biased, but countries like the USA are blessed to have different news corporations that represent different sides of the political spectrum. For example: Fox news is unabashedly right-wing, while CNN is even more so left-wing, so by paying attention to both you can get the bigger picture. However in South Africa, all major news outlets, so far as I have been able to observe lean left, significantly swaying public opinion that way as well.

I will say from the start that I am centre-right on the political spectrum. I know that will immediately turn some people away from reading this, but I hope you will stay, just to see things from a different point of view, even if you don't agree with me. And if you think I'm talking rubbish I'm open to debate. Leave a comment. (I'm brand new to this site, so I'm not sure, but I think you can leave comments.) As long as it is intellectual argument and not emotional name-calling I'm up for it.

What really inspired me to make my voice heard was the #FeesMustFall protests. Being a student at Wits, the epicentre of it all, I have first hand experience of what was happening, and what was reported in the media, even by international-award-winning Eye Witness News, was not a true reflection of what was really happening. The news portrayed the protesters as helpless victims of police brutality. In reality the police were being used as a tool to advance the interests of the protesters. An endless supply of clips of student-leaders accusing the police of firing rubber and tear gas unprovoked. These were however blatant lies. The protests were never peaceful. The protesters ignored court orders, abused the rights of other students, damaged property and threw rocks and other objects at the police. Then student leaders had the audacity to complain about the militarisation of campus as an infringement of the rights of students, which complaints got plenty of airtime, while they themselves organised to have lectures disrupted and the university vandalised.

One particular incident that I can give first hand experience on is the #TakeBackWits protest, which was organised as a peaceful protest, to give voice to those who wanted to continue with lectures, regardless of agreement or disagreement with the #FeesMustFall principles. Of course there were counter protesters to this movement and the media reported 'clashes breaking out' between the two groups. These "clashes" however were limited to a small group of all white students attempting to block our passage to the great hall, tearing our posters and yelling atrocities such as "F--- white people!" and calling us sellouts. And most impressively we managed to get all the  way to the great hall - where we were met with more intimidation - and back without any retaliation to the abuse we received. The media didn't report on this abuse of intimidation, but instead portrayed it as a back-and-forth, which was completely inaccurate.

So my posts will deal largely with politics and current affairs. I will point out bias and misinformation in the the main-stream media, as I have done in this post, and will provide an alternative point of view to the leftist propaganda you will hear everyday.